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Sunrise Inc. is considering a capital investment proposal that costs $227,500 and has an estimated life of 4 years and no residual value. The estimated
Sunrise Inc. is considering a capital investment proposal that costs $227,500 and has an estimated life of 4 years and no residual value. The estimated net cash flows are as follows:
Year | Net Cash Flow |
1 | $97,500 |
2 | 80,000 |
3 | 60,000 |
4 | 40,000 |
The minimum desired rate of return for net present value analysis is 10%. The factors for the present value of $1 at the compound interest rate of 10% for 1, 2, 3, and 4 years are 0.909, 0.826, 0.751, and 0.683, respectively.
Determine the net present value. Round interim answers to the nearest dollar. Enter a negative value as negative number.
Sunrise Inc. is considering a capital investment proposal that costs $227,500 and has an estimated life of 4 years and no residual value. The estimated net cash flows are as follows: Year Net Cash Flow 1 2 $97,500 80,000 60,000 40,000 3 4 The minimum desired rate of return for net present value analysis is 10%. The factors for the present value of $1 at the compound interest rate of 10% for 1, 2, 3, and 4 years are 0.909, 0.826, 0.751, and 0.683, respectively. Determine the net present value. Round interim answers to the nearest dollar. Enter a negative value as negative numberStep by Step Solution
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